Venezuelan Oil Head Mulls Revamp

Published 8:00 pm, Tuesday, February 12, 2002

The new head of Venezuela's state-owned oil monopoly said Wednesday he is considering revamping the company to cut costs.

"I have to seriously and vigorously examine the company's assets," Gaston Parra told reporters after being sworn in as president of Petroleos de Venezuela SA, or PDVSA. "Company plans may be amplified. They can be adjusted."

Parra said he would review PDVSA's international operations. He said that private domestic capital should be allowed greater participation in the company's oil operations.

Parra, a 68-year-old economist, became PDVSA'S fourth president in three years. He replaced Gen. Guaicaipuro Lameda.

Industry observers expect Parra to implement swiftly government plans to raise royalty rates imposed on companies operating Venezuela's state-owned fields. Lameda was critical of the initiative, which some economists warned would send investors to countries with lower rates.

Parra, a leftist and ally of President Hugo Chavez, helped draft the new Hydrocarbons law that raised royalty rates from 16 percent to 30 percent, among the highest in the world.

Industry experts also predict Parra will enforce strict compliance with production quotas imposed by the Organization of Petroleum Exporting Countries.

Venezuela, which currently produces 2.5 million barrels a day, has the largest oil reserves in the Western Hemisphere.